INTERVIEW: EU safeguard measures, CBAM expansion threaten Turkish steel industry - TCUD

Beefed-up EU steel safeguard measures expected to come in later this year will have far-reaching implications for Turkey's steel sector, Veysel Yayan, general secretary of the Turkish Steel Producers' Association (TCUD), told Platts in an interview discussing the outlook for 2026.

The EU has proposed doubling the out-of-quota duty on imported steel to 50% from its current 25% rate, which is due to expire June 30. At the same time, import quotas on tariff-free steel will be reduced by 47% compared to 2024, to 18.3 million mt.

Yayan said that the planned measures pose serious risks to the Turkish steel exports to the EU, with the loss in volumes potentially being as much as 60%.

"This would not only result in a direct loss of exports, but would also lead to additional pressure on the domestic market, as third countries affected by the EU safeguard measures are likely to divert their exports toward Turkey as an alternative market," he said.

Given that imports from China, other Asian countries and Russia have already reached exceptionally high levels, the risk of such trade diversion further intensifies existing concerns, he noted.

Turkey's steel imports from China have increased substantially in recent years, from just 395,000 mt in 2020 to 3.7 million mt in 2024 and passing the 4 million mt mark in the first 11 months of 2025, according to TCUD data.

"Against the risk of potential trade diversion, strict measures must be taken against dumped and state-subsidized imports of steel products originating from China," the general secretary said.

Platts, part of S&P Global Energy, assessed Turkish HRC at $550/mt EXW on Jan. 9, stable week over week. The assessment, however, was $15/mt lower than the beginning of 2025, despite around a $30 rise seen in imported scrap costs during the period.

CBAM expansion and Turkey's planned ETS

On top of the safeguard measures, the proposal submitted by the European Commission on Dec. 17 to expand the scope of the Carbon Border Adjustment Mechanism has further heightened concerns, Yayan said.

Although the mechanism was initially designed to cover a limited number of sectors -- namely steel, aluminum, cement and electricity -- the proposed expansion would encompass approximately 180 derivative products, 79% of which consist of steel and aluminum, including machinery, household appliances, and industrial equipment.

"Such an expansion is expected to negatively affect indirect steel exports, and to disrupt the relatively balanced structure that has been established between the EU and Turkey in the fields of basic metals and foreign trade, to the advantage of the EU," Yayan said.

Noting that Turkey's planned Emission Trading System (ETS) pilot phase is starting in 2026, Yayan said Turkish steel producers could be considered partially ready for CBAM and moderately prepared for the pilot ETS, but not yet positioned for deep decarbonization under a stringent carbon pricing regime.

CBAM default values

Yayan also criticized the secondary legislation published by the European Commission at the end of 2025, saying it gives the impression that it was prepared in a rushed manner and that certain issues were not examined in sufficient depth.

Highlighting that Turkey's steel production sector is about two-thirds based on electric arc furnace (EAF) technology with a high share of scrap usage, Yayan said the EU default emission values (excluding electricity) defined for products to be imported into the EU customs territory from 2026 were not acceptable for the Turkish steel sector.

"While emission levels for EAF-based steel production in Turkey should be around 0.70 mtCO2 per ton of steel, default values of 2.428 and 2.310 have been assigned to certain flat products and wire rod groups, particularly under HS codes 7208 and 7217, as if production were carried out entirely in integrated facilities," he said.

In particular, the clear differences in default values applied to Turkey and the US, despite the countries having a similar share of EAF-based production, could not be explained on technical grounds, the general secretary said. For this reason, it is important that these differences are clarified with the European Commission. Otherwise, it will become clear that these values are not based on data but are derived from subjective considerations, he said.

"Although the CBAM framework is based on the use of measured and verified emission data, there is a risk that, in practice, certain product groups may be forced to rely on default values. Therefore, it is expected that this issue will be addressed and resolved by the European Commission in the period ahead," Yayan said.

2026 outlook

Noting that significant uncertainties remain regarding the implementation of CBAM and similar uncertainty surrounds the timing of the EU's planned safeguard measures, Yayan said both issues are of critical importance for the global steel market in 2026.

While the EU opposes the US's imposition of similar tariffs on downstream products, it is simultaneously exploring ways to extend CBAM-related taxation to downstream sectors such as automotive, white goods, and other manufactured products, Yayan said.

This trend indicates that an increasingly broad-based protectionist approach is emerging, extending beyond the steel sector to other manufacturing industries, he observed.

"In the face of the evolving protectionist environment, it is essential to recognize that traditional response mechanisms are no longer sufficient and to urgently complete the necessary preparations to implement effective and timely countermeasures," he said.